Ginnie Mae’s efforts to clamp down on rapid refinance schemes and realign prepayment speeds with the conventional mortgage-backed securities market appear to be paying off. Securities analysts say the crackdown on issuers suspected of loan churning combined with increasing primary mortgage interest rates have reduced the prepayment-speed gap between conventional and Ginnie-backed collateral. Ginnie/Fannie Mae price swaps have improved greatly since Ginnie issued warnings to nine issuers in February to address churning in its MBS program and faster prepayments on loans backed by VA, said Kevin Cavin, head of mortgage strategy at Stifel Nicolaus & Co. Ginnie required the issuers to submit a plan to bring prepayment speeds in line with market peers. They were warned that failure to comply would result in temporary debarment from the agency’s multi-issuer pools and ...

New FHA Commissioner Brian Montgomery this week revealed that he’s in a “fix it” mode to preserve the government mortgage insurer for “generations to come.” In a wide-ranging interview with Inside FHA/VA Lending and other members of the trade press, Montgomery made it clear his goal is to make sure the Mutual Mortgage Insurance Fund – which backstops agency loans – remains in the black and above its minimum capital reserve ratio of 2.0 percent. During the interview, however, he hardly mentioned the MMIF by name but set parameters on what he would be willing to change at FHA. All his positions seem aimed at preserving and growing the fund’s cash position. First and foremost, there likely will be no cut in FHA premiums this year. Also, don’t count on any risk-sharing arrangements with private mortgage insurance firms. And last, the thought of ending the “life of loan” coverage that ...

Fair housing advocates are outraged over the Department of Justice’s recent repeal of mortgage shopping guides and other regulatory guidance, but an industry attorney says it is no big deal. Bent on eliminating agency regulation by guidance, the DOJ last week rescinded 24 guidance documents issued by a variety of government agencies. Among those revoked were guidance that provided information regarding predatory lending, consumer mortgage shopping and discrimination based on national origin. The DOJ action stems from a November 2017 memorandum issued by Attorney General Jeff Sessions rescinding guidance that either were issued improperly or were inconsistent with current law. It also complies with a presidential directive to all federal agencies in February to implement and enforce regulatory reform, which called for a review of all existing regulations, policies and guidance for possible repeal ...

The Department of Housing and Urban Development has removed the FHA inspector roster to streamline inspection requirements for FHA single-family mortgage insurance. Removal of the list of approved inspectors recognizes the quality of inspections performed by certified inspectors and other qualified individuals, said HUD. HUD originally established the roster to standardize the inspection process for properties with FHA-insured mortgages. Prior to the roster, cities and states developed their own building codes, which had little uniformity or consistency with each other. Currently, the department abides by the International Residential Code (IRC), which is in use in 49 states, the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands. The International Code Council, which developed the IRC, also certifies combination inspectors (CIs) and residential ...

The U.S. Department of Agriculture’s Rural Housing Service is seeking comment on a proposed rule that would enable more lenders to make combination construction-to-permanent single-family loans to borrowers. The new combination construction-to-permanent loan, or “single close loan,” allows approved lenders to close a new construction loan and receive a loan-note guarantee before construction begins. The loan expands low- and moderate-income borrowers’ access to affordable rural housing financing in areas with populations up to 35,000. The loan may be used to construct and purchase single-family homes, including manufactured homes and eligible condominiums. The amount covers purchasing a lot, reasonable construction administrative costs, contingency reserves, inspection fees, builder’s risk insurance, landscaping costs, and other authorized items, the ...

The mortgage industry this week continued to look for a fix to the VA Interest Rate Reduction Refinance Loan mess, which has imperiled roughly $500 million worth of government product that is now ineligible for Ginnie Mae securitization.

Ginnie Mae’s crackdown on certain issuers over loan churning – coupled with a backup in primary mortgage rates – has narrowed the prepayment speed gap between conventional and Ginnie-backed collateral, according to industry analysts.

If Congress is unable to pass housing finance reform, Steven Mnuchin, secretary of the Treasury Department, said on Thursday that the Treasury will “look at administrative options.”

The spring homebuying season fueled a relatively modest increase in production of Ginnie Mae single-family mortgage-backed securities during the second quarter of 2018, according to a new Inside FHA/VA Lending ranking and analysis. Lenders issued $98.66 billion of Ginnie MBS backed by forward mortgages during the April-May cycle. That was up 6.6 percent from the first three months of the year, but 2018 continued to lag behind the pace set in 2017 by 10.7 percent. Given current trends, annual Ginnie MBS issuance in 2018 could fall short of the $400 billion mark for the first time since 2014. The flow of FHA and VA purchase mortgages was up a solid 23.7 percent from the first to the second quarter, bringing the total for the first half of the year to $121.01 billion. However, that was down 4.7 percent from the same period in 2017. Ginnie securitized $75.02 billion of FHA purchase loans in the ... [Charts]

California Business Regulator Warns Lenders, Servicers on Filing of Mandatory Reports. On June 29, the California Department of Business Oversight warned residential mortgage lenders and servicers that their failure to file annual reports could lead to enforcement actions. The DBO supervises state-licensed financial institutions as well as licenses and regulates financial service providers. The agency cited data in its 2017 annual report, which showed that licensee business reports filed last year have dropped 8 percent from the prior year. DBO Commissioner Jan Lynn Owen called the decline “disturbing” and warned that the agency would take appropriate action to deal with licensees that do not file their reports. CA’s Residential Mortgage Lending Act requires all licensed mortgage lenders and servicers to file a report annually with the DBO. Failure to comply automatically triggers a department audit, which ordinarily ...